The UK’s Financial Conduct Authority (FCA) is covering a push to police the crypto industry, issuing warnings to unregistered exchanges and seeking legal action against companies that serve UK residents or promote digital assets in the country.
FCA issued hundreds Warnings Against unlicensed crypto exchanges in October, including select markets, nexure gainbit, plux crypto and HTX.
On Tuesday, the agency filed a lawsuit against HTX for promoting crypto services to UK residents, a spokesperson for the FCA confirmed to Cointelegraph. The FCA also said:
“We have found crypto companies to be positive in our financial rules and regulations; however, where we still see poor practices, we will not hesitate to take action where companies appear to have violated our rules.”
Crypto companies should FCA registered Under money laundering regulations and comply with UK financial promotions Lawswhich took place in 2023, in advertise or provide services to residents.
The UK’s renewed investigation of crypto companies comes amid Lifting the ban in Crypto Exchange-Traded Notes (ETNS) and publishing a Roadmap for tokenized investment funds in a bid to stay competitive in crypto-friendly countries like the US.
Related: ‘Keep pace’ or fall behind: Cryptouk says US-aligned key to UK Crypto Revival
The UK maintains strict regulations on the advertising services of crypto companies
Crypto companies advertising in the UK must meet strict criteria to run crypto-related ads or promote digital assets within the country, centered around consumer risk protections.
The FCA has categorized financial instruments into one of three risk buckets, starting with readily realizable securities (RR), including publicly traded companies, which the regulator said carry the least risk and feature no marketing restrictions.
Restricted mass market investments (RMMI), which include most cryptocurrencies, are classified by the regulator as having a medium risk profile, allowing investments to be traded publicly under strict consumer protection guidelines.
This includes integrated posted warnings about perceived risk, directing the user to information pages and other signals designed to alert the user and mandate Know-Customer Requirements.
Restrictions also limit the type of compensation or reward offered to consumers to encourage them to use a particular exchange or service.
Executives at crypto companies that breach UK advertising laws may Face two years behind bars and other legal penalties.
However, tough penalties do exist Didn’t stop with crypto ads in the country, according in financial times.
The outlet found that nearly half of all crypto ads flagged by the FCA between October 2023 and October 2024 remained online despite warnings.
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